David Cay Johnston is having a rough day at work. The veteran business reporter (he covered tax policy for The New York Times until he took a buy-out in 2008, and won a Pulitzer in 2001 for documenting corporate tax loopholes there) filed his very first column as a Reuters columnist today about Rupert Murdoch's News Corp. making money on income taxes. It turned out to be incorrect. Not just an embarrassing typo or a little bit off, but totally, absolutely wrong. A full correction is coming soon, and it will detail how, exactly, Johnston misread a News Corp. financial statement but for now there's this posting on Reuters' Mediafile blog: "Please be advised that the David Cay Johnston column published on Tuesday stating that Rupert Murdoch’s U.S.-based News Corp. made money on income taxes is wrong and has been withdrawn." Which to any journalist reads as one big ouch.
A new column will go over the details of Johnston's error, but the brief version is this: Because of a change News Corp. made in its annual reports during the seven year period Johnston reported on, his calculations on Rupert Murdoch's tax bills showed a negative number where there should have been a positive one. "This is particularly painful," Johnston told The Atlantic Wire via telephone. "I have been at this for 45 years. I have never, until now, had to do anything like this. I am assiduous about correcting the record."
The word of the withdrawal is spreading through Twitter as well, with Jim Impoco, executive editor for Thomson Reuters Digital, tweeting "Can't withdraw my tweets but will post DCJ's mea culpa soon: David Cay Johnston column on News Corp taxes withdrawn."
In 2007, News Corp. switched from reporting its taxes paid as positive numbers to negative numbers by putting parentheses around them. Parentheses, Johnston pointed out, customarily represent negative numbers (though that's not set in stone), and News Corp. had decided to report the taxes as negatives since it had paid them. The company retroactively changed its reports for 2005 and 2006, as well, which it notes in its 2007 filing: "Certain fiscal 2006 and fiscal 2005 amounts have been reclassified to conform to the fiscal 2007 presentation."
"I probably read that disclosure and just didn’t realize what it was reporting," Johnston said. "This is very finely detailed stuff. I missed that they switched the number. It isn’t common practice, and I shouldn’t have missed it. At the end of the day, the fact is, I shouldn’t have missed it." Johnston said he should have seen that the numbers had shifted from positive to negative from one year to the next, but he didn't. Now, he's hustling to set the record straight. "I’m going to be on NPR tomorrow, I called The Ed Show, which had me on, to ask them to send out my statement, and a link to the column," he said. "Everybody makes mistakes, the issue is how you deal with correcting them."
Update (7: 40 p.m.): Johnston's follow-up column documenting and apologizing for his mistake has just published. Find it here.